Last week I shared a recent article that shed a light on just how little most American’s have saved for their future.
I also shared an exercise I had attendees of a financial independence class I used to teach in which they would discover their lifetime earnings via the social security website. If you have not done this, I truly urge you to. It takes about five minutes to set up your secure account and see your lifetime earnings.
Next, I had everyone complete a Net Worth worksheet to really identify what they had to show for all the money they’d earned throughout their working life.
Once the initial shock wore off at the disparity between what they’ve earned and what they now have to show for it in the form of their net worth, it was time to get to work on creating better money habits and building a more secure financial future.
This week, I want you to calculate your Net Worth. Open up an Excel spreadsheet, or a Word document, or heck, just grab a piece of paper.
On one side, list all of your assets. These include the value of your home(s), your cars, money invested and in the bank, your retirement accounts, and so on.
On the other side, list all of your debts. These typically include your mortgage(s), student loans, credit cards, home equity lines of credit, auto loans, etc.
Once everything is listed, subtract your total debts from your total liabilities, and you have your Net Worth.
Is it a positive number? Is it a number you are proud of, or discouraged by? Is it better or worse than you thought it would be?
Regardless, this is just a starting point. Now it is time to let go of the past. No shame, no blame. Pretend that everything leading up to today was practice, and the real money game starts TODAY!
- Where will you commit to spending a little less?
- How much will you commit to saving EVERY single month, whether it’s $10 or $1,000 BEFORE you spend anything or pay your bills?
- What are your savings goals? Get emotionally committed to making a change.
It is simple, but not easy. As I said in last week’s article, the first step is committing to a bigger, better financial future. The second step is having the courage to make necessary changes.